Bitcoin's Bull Trend At Risk After High-Volume Price Dump

View Bitcoin dropped 9.3 percent yesterday on the back of high volumes, invalidating the triangle breakout witnessed last Monday.

A UTC close below $3,714 today would validate Sunday's bearish outside reversal candle and open the doors to levels below $3,400.

The longer duration charts are signaling bearish exhaustion and any drop to $3,400 or below could be short-lived.

Bitcoin nosedived overnight, clouding the interim bullish outlook, and a deeper drop could unfold if key support near $3,700 is breached.

The leading cryptocurrency by market capitalization rose to highs near $4,200 in the Asian trading hours yesterday, as expected, only to fall back to levels below $3,800 by UTC close.

That said, a bullish-to-bearish trend change would be confirmed only if the sell-off seen yesterday is extended to levels below $3,700.

A bearish reversal would be confirmed if prices close today below $3,714.

The probability of BTC closing today below $3,714 would rise if the pennant pattern seen on the 4-hour chart is breached to the downside.

A break below the lower edge of the pennant, currently at $3,740, would confirm a breakdown and could be followed by a sell-off to $3,360.

As a result, sellers need to be cautious even if prices break below $3,700 today, as the ensuing losses could be short-lived.